Dec 20, 2016 3 min read

A Fund for Emergency! Just Have a Look Here

Uncertain situations arise in the life of everyone. Here is the best solution to cope with the urgent financial needs through the emergency fund

Have you ever experienced financial distress in life? Hope not! But this uncertainty can take place in the life of any person. There come situations when we do not find any source of income and suffer a financial crisis. To manage during such situations, we indulge in saving money so that we never get overburdened by debts. Here we provide you with a solution to make your bad times extremely better with emergency funds.

What are Emergency Funds?

An emergency fund is an account which is used to set funds aside in order to utilise them when needed at the times of personal financial dilemma, such as losing the job, an exhausting illness or a major expense. This fund is meant to provide and improve the financial stability of a person by creating a safety net of money. It is used to meet the sudden, unexpected and emergency expenses to reduce the need of borrowing money.

What Makes Emergency Funds Reliable?

The funds for an emergency have to be highly effective and efficient so that we could attain the objective for which we created them. Their reliability depends on the features or traits that they possess. Following are some of the major characteristics that an emergency fund must have:

  • It Must Be Liquid in Nature:- Liquidity refers to the capability of getting encashed as and when required. Easy cash convertibility is a must for emergency funds as at the times of uncertainty we need quick cash. Thus, we must ensure that the fund we have chosen for urgency must be highly liquid in nature so that we can attain cash on an immediate basis.
  • It Must Be Less Volatile:- Volatility refers to the measure at which the interest rates fluctuate as per the market moves. Many investments are highly volatile in nature that their return is highly affected by the market ups and downs which lead to fall in the values as well. The emergency funds must not be volatile in nature as we cannot afford losing money on investments which are made to overcome the uncertain situations in life.
  • It Must Provide Insurance:- The investments in the emergency fund must provide protection against the uncertain events in life. With this, we remain confident to overcome every bad happening in life with ease. It further helps in reducing the burden of debt holdings.
  • It Must be Safe And Easily Accessible:- Apart from all other traits, the emergency funds have to be easily accessible so that we could reach them immediately in case of urgency. Thus, we must not only focus on holding long-term investment solutions, rather must have some short-term funds as well in the portfolio.

Keeping all the traits in consideration, our team members at MySIPonline believe that the only solution for maintaining emergency funds is to opt for Liquid Mutual Fund. It possesses all the qualities which are a must in an emergency fund. If you invest your money in liquid funds, you would be able to counter every uncertain event in your life with ease.

So, if you feel investing in liquid funds is worthwhile and want assistance on choosing the right scheme for your portfolio, then you must avail the advisory services of our financial consultants. They will advice you on the best solutions and services to help you make your life secure.